BAE Systems

The law triumphs

Backhanders, slush funds and the machinery of death. Award-winning Guardian reporting has already established that the dealings of BAE Systems are decidedly unsavoury. Yesterday, however, the high court ruled that the favour shown to the firm and its Saudi clients was also unconstitutional. Lord Justice Moses pronounced that, by pulling the plug on a criminal investigation into alleged corruption into BAE's biggest arms deal, the authorities had disregarded their legal duties. When the Saudis demanded the probe be called off, no one explained that justice could not simply be swept aside. Instead Whitehall cravenly concluded that capitulation was nasty but necessary.

Although the notional defendant was the head of the Serious Fraud Office, the judgment made plain that responsibility went right to the top. The court signalled that its understanding was that the Saudi Prince Bandar "went into No 10 and said 'get it stopped'". Allegations that the same Prince Bandar had been paid £1bn in kickbacks from BAE were at the heart of the SFO inquiry. In these circumstances the then prime minister, Tony Blair, should have treated his threat to cut off security cooperation with scepticism. But, as the judges commented, there is "the suspicion" that the security issue was "a useful pretext" for ditching an SFO inquiry that was harming commercial interests. Mr Blair duly picked up his pen and took, as he put it, "the exceptional step" of writing to the attorney general, Peter Goldsmith, to spell out the damage. Lord Goldsmith withstood earlier attempts to bully him into dropping the case. But on receipt of the minute, the man who shifted his advice on the legality of invading Iraq proved to be Mr Blair's flexible friend once again. Suddenly persuaded, he spoke to the SFO, which also fell into line.

Had the Saudi threats been made by a defendant in this country, he could be charged with perverting the course of justice. In insisting that such blackmail is just as unacceptable when it comes from a foreign state, the court has struck a blow for the precious principle that the law must apply without fear or favour. The practical consequences remain uncertain. The SFO could appeal, though it may conclude that yesterday's closely reasoned assertion of the independence of legal process from political interference is something few judges would enjoy overturning. The high court has still to decide what remedy it will apply - whether to declare the decision illegal or to formally quash it. Either way, Whitehall could try to cook up an alternative rationale for halting the investigation, to see whether the courts would swallow it. But if Gordon Brown wants to show he has left the excesses of the Blair years behind, he needs to do better than that.

The anaemic constitutional reform proposals announced recently, however, suggest that few lessons have been learned. Last year Mr Brown said he wanted to restore confidence in the attorney general's office - implicitly admitting that BAE had tainted it. Last month, when plans to take the politically appointed attorney out of prosecution decisions were presented, there was a sweeping national security exemption. The sort of decision ruled illegal yesterday could therefore happen again. Worse, the attorney could - unlike now - assume direct command of any case which he or she deemed to have a security dimension. With the attorney directly in charge, it would be far harder - perhaps impossible - to launch the sort of judicial review which shed such valuable light yesterday.

Mr Brown bills his plans as constitutional renewal, but on this point they could prove retrogressive. If he wants to show that there is substance behind the impressive rhetoric he has deployed on behalf of liberty, he must show he is serious about the rule of law. The first step towards doing that is reopening the BAE probe. The next is changing the law so that justice can never again be scuppered in the same way.